How Will Marriage Impact My Savings for Retirement?

New research from Boston College’s Center for Retirement Research has analyzed individuals’ contributions to a 401(k) plan, before and after marriage.

“Millennials marry later than previous generations. Since marriage is a major life milestone that often marks a line between youth and adulthood, a logical question is how this delay affects retirement saving,” the report states.

The report looked at data from the Survey of Income and Program Participation linked to W-2 records on defined contribution plan deferrals, to determine the extent to which marriage affects retirement savings.

The results of the analysis show that people increase both their participation in and their contributions to 401(k) plans after marriage.

In terms of participation, men respond a bit more after marriage than women. The research shows that men have lower participation rates than women before marriage, but they wind up at the same level once married.

After marriage, women increase their contribution rate by an average of 0.8%, compared to only 0.3% for men, according to the research.

Following these results, the research then looks at what this means, if the trend toward later marriage continues. To do this, the research looks at how much retirement wealth accrued in 401(k) plans by age 65 would have been impacted, if men and women married later than they do now.

The analysis assumes a five-year delay in marriage, which is based on the approximate increase that occurred between baby boomers and millennials.

The analysis finds that the effect of delay, while statistically significant in the regression, is small—a 3.1% decline in accumulated assets for men and a 3.4% decline for women.

“While the delay in marriage may be problematic for some forms of savings—delaying homeownership for example—it seems unlikely to make a large dent in retirement savings,” the report states.